Divergence Intelligence 2.0
MARKET ANALYSISWhen price and momentum diverge
Explore recent differences between price action, RSI and MACD. Examine each signal in its market context.
Divergence Explorer
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Technical analysis
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MARKET ANALYSIS
Understanding Crypto Divergence with RSI and MACD
Crypto divergence occurs when price action and a technical indicator move in different directions. For example, a cryptocurrency may reach a lower low while the RSI forms a higher low. This difference may suggest a change in momentum, but it does not automatically predict a price reversal.
Divergence Intelligence by Markets Understood lets you explore potential bullish and bearish divergences across EUR spot markets on Bitvavo and Kraken. Price movements and indicators such as RSI and MACD are examined within their market context.
Bullish divergence
Bearish divergence
What Is Bullish Divergence?
A classic bullish divergence occurs when price makes a lower low while an indicator such as RSI forms a higher low. This may suggest that downward momentum is weakening even as price continues to fall.
Bullish divergence is not a buy recommendation. Prices can continue falling, and a divergence observation may change or prove insignificant.
What Is Bearish Divergence?
A classic bearish divergence occurs when price reaches a higher high while RSI or MACD forms a lower high. This may indicate weakening upward momentum.
Bearish divergence is not a standalone sell signal. Market structure, volume, volatility and timeframe remain important.
RSI Divergence vs MACD Divergence
RSI divergence compares price highs or lows with movements in the Relative Strength Index. It helps identify situations where price action and relative strength differ.
MACD divergence compares price movements with the Moving Average Convergence Divergence indicator. It can help explore potential changes in market momentum.
RSI and MACD measure different aspects of market behaviour. Potential divergences should therefore be examined alongside the price chart.
Why Does the Timeframe Matter?
A divergence observed on a 5-minute chart may have a different significance from one observed on a 1-hour chart. Shorter timeframes can change more quickly and may contain more market noise.
Always consider the exchange, market and timeframe associated with a potential divergence.
Divergence Intelligence as an Analysis Tool
The current Divergence Intelligence tool displays research observations of potential divergences. These observations have not been validated as reliable trading signals.
Use the information to investigate market behaviour, not as standalone investment or trading advice.
Regular and hidden divergence
A regular divergence occurs when price and an indicator diverge in a way that may suggest weakening momentum. A hidden divergence can occur within an existing trend and is often examined as a possible indication of trend continuation. Both require broader market context; neither independently predicts future price movements.
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